9911796707
TMI Blog2003 (12) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... t dispute the duty demand raised in respect of free gift of items and short payment of duty on moulds. 3. The main demand under the order of over Rs. 240 lakhs is in respect of defective chairs. The appellant manufacturer provided guarantee for an year in respect of their chairs. During this period, if the chairs were damaged on account of manufacturing defects, upon return of the chairs, the appellant used to give a credit equivalent to the value of the goods. Under a Circular dated 9th March, 2000, the appellant revised the policy with regard to guarantee. Based on this circular and other materials collected during investigation, the impugned order has held that there was an additional realization in respect all of the chairs sold by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost of the damaged goods. The amount of Rs. 30/- is related to the freight in returning the goods to the appellants. There is nothing in the statement relied upon also which is indicative of the appellant receiving any additional consideration upon the sale of the chairs than the invoice price. There is not also a case that the appellant cleared any chairs for free replacement without payment of duty. In these circumstances, we are of the opinion that the demand raised under this head has no legal or factual basis and is required to be set aside. 4.The second item of demand (Rs. 3.62 Lakhs) is in respect of Additional Trade discount given to distributors at the rate of 1%. The impugned order has held that this discount is towards damaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular manner. Sub-clause (iii) of the para reads as under :- In case"(iii) allowable credit is more/less than the Additional Trade Discount already given in the invoice, the difference shall be adjusted by way of Debit/Credit Note." Based on these paras the submission of the learned SDR is that this discount is intended to be adjusted towards damages incurred subsequent to the sale of the goods. He has submitted that it is well settled [Commissioner of Central Excise, New Delhi v. Vikram Detergent Ltd., 2001 (127) E.L.T. 641 (S.C.)] that damage discounts being in the nature of refund or benefit to buyer by way of compensation for damage, breakage or losses suffered by goods after removal from the factory is not eligible for deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Counsel has pointed out that, difference in the language used under condition No. 10 and condition No. 12 made this clear. It is the learned Counsels point that condition No. 12(i) provided for aggregate value of clearances of all excisable goods manufactured by the appellant or on his behalf for home consumption from one or more factories, during the preceding financial year, while condition No. 10 did not provide for aggregation. We have perused the records and heard the learned SDR also on this issue. We may read the condition No. 10 for ease of discussion. This condition reads as under :- The manufacture does not avail of credit"10. of duty paid under Rule 57A or 57B on the products mentioned in column (2) or any other pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n confirmed by the Hon'ble Supreme Court. The learned SDR has, however, brought to our notice the decision of the Apex Court in the case of ITC Ltd., 2003 (151) E.L.T. 246 (S.C.), and pointed out that it was for a manufacturer to prove that the goods in question had actually been destroyed during testing. A perusal of the decision of the Apex Court makes it clear that manufactured goods which are destroyed during testing is not liable to excise duty. The only requirement which the appellant in that case failed to meet was that accounts about the goods drawn for destructive testing and the quantity actually got destroyed had not been produced during the proceedings. Thus, the legal position about eligibility of destroyed goods remains the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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